PDVSA supervisory board to appeal decision allowing new creditors to go after Citgo

A board that oversees Venezuela’s assets abroad plans to file an appeal next week of a US court decision that granted four companies the right to go after shares in the parent company of refiner Citgo Petroleum, based in Venezuela. In Houston.

A US court is preparing for a share auction to satisfy a $970 million claim by Canadian miner Crystallex stemming from an expropriation of its Venezuelan assets.

Other companies have tried to attach their own judgments to the case, prompting a dispute this week between lawyers over creditor priorities.

The decision of a United States judge in Delaware Approving new companies to join the case and proceeding with an auction depends on the approval of the US Treasury Department.

OI Glass Inc OI.N, Huntington Ingalls Industries Inc HII.N, ACL1 Investments Ltd and Rusoro Mining Ltd RML.V have been given the green light by the court after proving that state oil company PDVSA was the “alter ego” of the Venezuelan government.

An ad hoc board created by Venezuela’s National Assembly in 2019 to oversee the foreign subsidiaries of state oil company PDVSA is set to oppose “any conditional embargo,” board chairman Horacio Medina told Reuters.

Lawyers representing Crystallex and US oil company ConocoPhillips COP.N, who have been fighting for years to recover billions of dollars in expropriated assets, complained on Thursday that the rights granted to additional creditors could complicate any sale.

“We may need to think about how the court will classify what is now becoming a very significant number of very substantial claims,” ​​said Amy Wolf, an attorney representing ConocoPhillips.

Even without the blessing of the US Treasury, which has shielded Citgo from creditors in recent years, US Judge Leonard Stark has set a timetable for an eventual auction and has asked investment banking firm Evercore Group to begin work on the process.

Stark this week rejected a motion by lawyers representing Venezuela to disqualify the appointee to manage the potential auction and said he hopes to hear by April 7 whether the US Treasury would allow a transfer of shares.

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